The Ethics of Piracy in the Digital Age

Ebooks, digital downloads, torrents and the Internet have fundamentally altered the nature of commercial transactions, but definitions of ‘piracy’ remains stuck in the 17th century, in the heyday of pirates at sea.

Maritime piracy is clearly evil. Maritime merchant shipping transfers goods from a supplier to a buyer. The supplier expects payment and the buyer expects goods. By attacking ships at sea, pirates deny the buyer his goods. If the buyer doesn’t receive his goods, the supplier either will not receive payment or will lose future customers. Many pirates also take the opportunity to rob the crew and passengers, and sometimes kidnap them for ransom.

Software piracy is far more ambiguous. It is the act of illegally reproducing a work of intellectual property. No physical goods are stolen; rather the original is cloned. No goods are stolen, no payment denied. No middlemen and no innocents are harmed.

The primary argument against digital piracy is lost sales. After copying the IP to physical media, the pirates sell the media at much lower prices. This undercuts the original merchant, translating into lost sales. The pirates are profiting from the creators’ efforts at almost no cost to themselves. The creators are not rewarded for their work, discouraging them from future work.

This argument might be true in the era of CDs, DVDs and printed matter. But that era has passed.

The Reality of Digital Piracy

Torrents and download sites are everywhere. If you have an Internet connection, five minutes on a search engine will turn up plenty of pirate sites. The authorities might squash one or two every now and then, but more will inevitably pop up. The cost of hunting down pirate sites, identifying the owners, obtaining court orders and serving warrants is far greater than setting up anonymous sites and obtaining proxy servers. And there will always be demand for piracy. Further, pirated digital goods — music, movies, games, ebooks — are freely available. There is no reason for consumers to buy pirated material if they can download them from the Internet for free.

The pirates do not normally profit from sales of software. Many pirates do not even sellsoftware to consumers. This indicates that the people who pirate software are people who would not have purchased anything from the creators. No sales are lost. This undercuts the primary argument against piracy.

If no goods are physically stolen, if payments are neither intercepted nor prevented, if no innocents are harmed, is piracy still unethical?

The Ethics of Digital Piracy

Here we see manga in their native habitat: a bookstore in Japan. Many Japanese manga are not translated into English, and will never be. Even if they are, the salacious covers of some of these manga will ensure they will never be imported into my home country. These linguistic and legal barriers will prevent the manga from reaching a wider English-speaking audience.

Enter scanlation groups. These groups scan and translate Japanese manga, posting them online for people to read. While many are amateurs, they provide a service professionals do not or cannot. Most scanlation groups do their work for free, covering their costs from out of pocket. Some will solicit for donations, but only to cover operational costs — including purchasing a legal copy of the original manga to scan and translate.

Scanlation groups make Japanese-language manga available to people who speak different languages free of charge. The author loses no sales; his books were never for sale in those languages to begin with. Nobody is harmed and no profits are made. While this is technically piracy — how does it harm people?

What about goods that are widely available, such as computer games? Here, pirates are consumers who do not want to buy a good at a certain price point. This is an argument for proper price strategy, not anti-piracy measures. This is why many game companies run sales regularly on outlets like Steam and GOG. With that said, we can’t expect publishers to constantly set a price that forces them to make a loss, and there will always be people who will never pay a cent for games.

There is no way to extract profit from people who won’t pay for a digital product. If piracy were not available to them, they would simply not consume the good. Going after these pirates would tend to generate bad press for the company, especially if people think the goods are overpriced. On the other hand, if these pirates are left alone, some of them will inevitably talk about the goods, driving brand awareness. So long as the pirates do not resell their copies for profits or attempt to pass off the creators’ work as their own, they are harming no one. Instead of wasting finite time and resources chasing people who won’t give them money, publishers should instead serve their paying customers and make more products.

Piracy doesn’t just affect publishers; it also undermines state power. In 2007, the Media Development Authority banned Mass Effect in Singapore for portraying same-sex relationships — never mind that the relationship in question was between Commander Shepard (who could be male or female) and Liara T’soni, a monogender alien who appears female to human eyes. Elsewhere, Germany bans anything that depicts Nazism in any form, while Australia has a dim view of games with graphic violence or sexual content.

In those countries, piracy of prohibited content is undoubtedly commonplace. If a product is widely and openly available everywhere but in a consumer’s home country, a consumer who wants the product will seek it out through illegal means. It is simply human nature. Since these goods are already banned in these markets, no sales are lost. On the other hand, the creators’ brand name continues to spread — and it is this brand name that makes or breaks artists. Through piracy, state power is undermined — but this is neither an unmitigated positive nor negative outcome.

Consider that Singapore also bans pornography of all kinds. If you believe that pornography is immoral and harms people, then obvious piracy of pornography weakens the moral fabric of the nation, making it evil. If you believe pornography is harmless, than this ban is excessive and piracy circumvents it.

But piracy is not just about immorality and mindless entertainment, either.

Singapore has banned a number of books, including The Satanic Verses. It is illegal to buy or sell any copies of The Satanic Verses in Singapore. But this book can be found freely on sites like Amazon. Similarly, you can find plenty of material on Amazon that would otherwise be banned elsewhere. Not so coincidentally, the Kindle store is not available in Singapore, making it nearly impossible to purchase many ebooks from the Kindle store. More often than not, if you are Singaporean you can only obtain Kindle-exclusive books through pirate sites.

It is easy to claim that piracy performs a social good by defeating censorship and supporting freedom of speech and expression. But consider this: Singapore is a tiny Chinese-majority nation surrounded by large Muslim-majority neighbours. Race and religion informs practically every political decision Singapore makes. By banning The Satanic Verses, Singapore arguably prevented any possibility of a race and religious riot in Singapore andanti-Singapore protests in Malaysia and Indonesia. If censorship could potentially prevent social disorder and unrest, is it necessarily an undiluted evil?

Beyond questions of state power, there is also the question of the publisher’s power. Many digital products come with some kind of digital rights management software. The idea is to prevent unauthorised use, sales or reproductions of the software. While DRM does a fine job in protecting a publisher’s profits at the point of sale, in practice it harms users past the point of sale.

DRM takes away control of the customer’s computer and degrades software performance. It requires the computer to perform actions not ordered by the customer. Unscrupulous publishers can insert spyware into a consumer’s computer under the guise of DRM, allowing them to gather or destroy the user’s private data. DRM that requires a constant Internet connection, especially to authentication servers, make the software fragile: the moment connection is lost or the servers are shut down, the game is gone for good. Ebook DRMs prevent the user from reading the same ebook on another personally-own device – which can be troublesome if you need to convert an ebook into another format before you can read it.

There is also another aspect of piracy: making old and outdated products available. When books and movies stop being profitable, when software is superseded by new hardware, these products are permanently taken off the market or relegated to distant specialist shops. This does not mean that they have no worth, only that they are no longer profitable to be placed in the market.

Piracy makes these products available to a fresh generation and ensures their continued circulation. Nobody makes a cent from this, but more goods that are no longer in the market are created. For companies that have a long and storied backlist, piracy of no-longer-available products allows their fans to see how far they have gone and introduces new ones to the company. While many companies these days are seeing profit in remastering, converting and re-releasing old products, these companies tend to come from the gaming, music and movie industries. Books, instructional videos and obscure artistes get the short end of the stick.

An Ethical Framework for Piracy

With so many issues to resolve, how does one create an ethical and legal framework to handle piracy?

The fundamental principle must be to do no harm. Laws are broad and uncompromising, and are enforced at the point of a gun. The broader a law, the more innocent people will be swept up into jails and morgues. Restricting laws to the harm principle means the state may only prosecute people who have caused measurable harm to a party.

From a digital piracy perspective, this means that publishers and creators must make a strong case for harm. They must prove that the pirate stole goods and profits. They must prove that the pirates discouraged creators from creating new works. They must prove that the pirates have harmed innocent people. If the pirate has not harmed anyone, they must not be prosecuted. This would mean a legal framework that is strongly in favour of individual liberties, freedom of expression and consumer rights.

As for DRM, the answer is simple: no DRM. If a publisher wants to introduce DRM, the onus is on the publisher to prove that the DRM cannot be used to subvert the user’s computer, will not gather private information, and will not degrade product performance. Any DRM that infringes upon the user’s property rights should be eliminated.

What about the individual? If a specific act of piracy harms no one, as we see in a number of cases, then the question is simply a matter of individual conscience.

Photo Credits:

  1. Mass Effect wallpaper by Suicidebyinsecticide
  2. DRM protest by Electronic Frontier Foundation

A deeper look at piracy

The Singapore government has implicitly taken the position that piracy undermines the creative industries. According to a news report from Channel News Asia, Law Minister K Shanmugam is working towards creating a legal framework that would clamp down on online piracy and protect intellectual property rights. This position seems morally right and just. But it’s overly simplistic.

Shanmugam indirectly argues that piracy stifles the creative industry, by linking a strong legal framework to helping creative industries. This is not true. On the contrary, piracy helps the creative industries by publicising innovation and pressuring the big companies to respond to the marketplace. As described in The Pirate’s Dilemma, a large number of music genres – acid house, dubstep, hard-core – took off after being broadcast by pirate radio stations in the United Kingdom. These music brands began life as too unconventional for mainstream taste, but the pirate radio stations gave artistes a platform to reach out to large audiences, given the artistes the critical mass necessary to achieve mainstream popularity.

The same can be said for Japanese manga, through the scanlation community. Whenever a new manga volume is released in Japan, people scan the entire issue and post the raw images online. These raws are downloaded by translators, who translate the works into different languages, and publish the translated issues online. Both the scanners and the translators are, for the most part, ordinary people who happen to possess the right equipment and know-how to hold up their end of the scanlation process. This allows Japanese manga to reach audiences far outside Japan – especially for manga that are released only in Japan. With some creativity, these audiences can be turned into paying customers.

It is true that online piracy leads to the loss of revenue. The music and motion picture industries (among others) routinely report losses in the hundreds of millions, if not billions, of dollars. In Singaporean movie theatres, advertisements extolling audiences to respect IP rights and cease pirating are regular screened before the feature film. These advertisements claim that failure to respect IP rights will lead to filmmakers choosing to cease making films, and movie theatres to close down. But this advertisement does not ring true in a world where the global movie industries continue to rake billion-dollar revenue in ticket sales alone. While it is true that there will be some people who will consume pirated content without giving IP owners any compensation, piracy can help boost sales, as in the case of Japanese anime, music, and books. The big picture is, quite clearly, more complicated than what the big corporations are saying.

Governments and corporations need to stop blaming pirates and start understanding why people pirate IP. Speaking as an IP owner, I can think of three reasons why people do it.

1. Cost

Let’s face it: when forced to choose between paying $50-plus for the latest blockbuster video game, or waiting patiently for a few hours/days/weeks to download that same game off a torrent website, there will be people who will gladly choose the latter option. Especially if, for a few more hours of waiting, they can have any additional downloadable content or extra features that have already been released. Even more so if these people live in places with low income, and high prices for IP. The same holds true for other kinds of IP: books, music, movies, television dramas.

2. Availability

There is a large amount of IP that is simply not readily available in some parts of the world. Anime and manga, music, and more. Pirates create and meet demand for this IP by publishing and distributing this IP on places where users can readily access this IP. Sometimes this is done using legal means like YouTube. Sometimes this is done using more questionable means, like pirate radio stations. The platform pirates use are engineered to reach a large number of people at low cost, giving them a distribution network that could potentially rival the ones used by existing companies.

3. Convenience

Digital Rights Management tools are complicated. Many games, such as Operation Flashpoint: Dragon Rising, Splinter Cell: Conviction, Assassin’s Creed 2 and beyond, have DRM measures that prevent people from (easily) pirating software. The same goes for music, ebooks, and other digital IP. But these measures punish legitimate consumers. Coding a program to prevent multiple installations of the same game from the same DVD (such as SecuROM) may sound like a good idea, but this prevents legitimate consumers from re-installing their games. This can happen when the computer is reformatted, when the user gets a new computer, or when the user simply wants to play the game again after having deleted it. These are perfectly legitimate uses, but DRM software like the one I’ve described punish users for doing any of these by preventing consumption of software. Other tools, like the one used by Arkham City, are fairly complex to navigate and spoil consumer enjoyment. Pirates make consumption of IP convenient by scrapping DRM tools  from the original content and posting the now-DRM-free content.

Legislation is not the answer to these questions. These are legitimate consumer needs not being met by the companies that insist on DRM regulation and strict anti-piracy policies. Strict legislation may make piracy more inconvenient, but it will not address these concerns. If anything, they will exacerbate them, because consumers will have fewer places to address these needs, and they will take out their frustrations on the corporations by refusing to buy their IP and spreading the word to boycott their products. This creates additional market pressure on the pirates, who will at some point team up with hackers and crackers to circumvent any new anti-piracy means to publish pirated content.

What is needed is a new business model. Pirates shouldn’t be seen as evil money-sucking parasites. Pirates should instead be considered as friendly competitors. IP owners should strive instead to compete with pirates on their terms – on the terms of cost, availability and convenience, and any other reason why consumers will choose pirates over legitimate purchases. In this sense, piracy can be thought of as simply an additional cost of business.

If possible, IP owners should also factor piracy into their business models and understand how to use their distribution models to the IP owners’ advantage. Underground music artistes in the UK went mainstream after the mainstream record companies started collaborating with the pirate stations. The pirates gained prestige, the artistes made more money, and so did the record companies. It could be possible to do something similar for other IP. Author JA Konrath reported an explosion of sales after he started giving away one of his ebooks. Shortly after the creation of the Baen Free Library, in which Baen’s published books are posted online in their entirety for free reading, Baen reported increased sales of those published books. In those two cases, online pirates could easily reproduce the text of those books and distribute them for all to see. The result was increased publicity, increased consumer awareness, and therefore increased sales.

Piracy is a problem that has been around since the articulation of intellectual property rights. Legislation has done little to curb it. What is needed is a different approach. Instead of trying to stamp out piracy, companies should instead seek to meet the consumers real needs and wants, and compete with pirates on their turf. Companies should also seek to co-operate with the pirates to create win-win situations, or at least situations that are advantageous to the IP owner. IP is produced for consumption – it’s time to understand understand what the consumer wants and meet it, instead of blindly focusing on profit.